It’s been a great week for Railgun.

The privacy protocol’s governance token, RAIL, is up almost 300% after the Ethereum Foundation announced a new wallet toolkit that directly integrates the protocol on Wednesday.

It’s the fastest price increase the token has experienced since its 2021 debut, and puts its market value at almost $300 million.

The integration is not only a vote of confidence in Railgun from Ethereum’s thought leaders, but it should also give the protocol a significant boost by promoting its use.

The Ethereum Foundation’s toolkit, called Kohaku, is a new reference implementation of a privacy-preserving wallet which developers can use to help build their own wallets.

Railgun isn’t the only privacy protocol to be integrated. Privacy Pools, a similar product developed by 0xbow, and Tornado Cash are also on the list.

It comes amid the foundation’s broader push to enhance privacy on the Ethereum blockchain, which includes a new 47 person team who will develop several new privacy tools.

The Ethereum Foundation is a non-profit that supports the Ethereum ecosystem.

Launched in 2021, Railgun is a decentralised blockchain protocol that helps keep users’ transactions and wallet balances private. It works similarly to Tornado Cash, but adds features to prevent bad actors from laundering money through the protocol.

Privacy matters

Ethereum transactions, like those on most blockchains, are public by default, making protocols like Railgun and Tornado Cash valuable for privacy-conscious users. If someone knows a user’s Ethereum wallet address they can see how much crypto they own and their entire transaction history.

Criminals have used this public information to target large crypto holders, resulting in many high-profile thefts, kidnappings, and even murders.

Ethereum co-founder Vitalik Buterin has long been a vocal supporter and user of protocols that enhance privacy.

Last month, he called on privacy protocols to develop multi-signature wallets, a kind of multi-factor wallet that’s become a security standard in the crypto industry, to encourage more use.

Railgun contributors told DL News they have created a working prototype for such a wallet, which they plan to demo at the Devconnect Argentina conference in Buenos Aires next month.

Profitable business

In addition to helping keep users safe, privacy protocols are also a lucrative business.

The Railgun protocol generates more than $5 million in fees annually, according to DefiLlama data.

This profitability often positively impacts a protocol’s associated token.

In recent months, several decentralised finance protocols have begun working towards sharing revenue with token holders, similar to how some companies share their profits with shareholders in the form of dividends.

Crypto investors often consider the potential for protocols to share their excess revenue with token holders when deciding whether or not to invest.